Making Money Mobile
The days of static, landline-based card payment processing systems appear to be numbered as salons increasingly look for more flexible and mobile options. With the Bank of England introducing plastic banknotes from 2016 it’s safe to say soon even the very smallest salons will be accepting plastic. But, levity aside, increasingly clients do expect to be able to pay by card, however small the transaction or salon.
As Chris Davies, managing director of Global Payments argues, salons that cannot take card payments in this day and age are likely to lose business as a result.
“In addition, cash has an invisible but heavy cost: in banking, security and even the complications of tracking cashflow through the business. As many salon owners will know, cash payments are sadly also very susceptible to fraud and theft,” he says.
“Many consumers are using cash less often, sometimes because they forget to draw out enough or don’t visit an ATM at all. Therefore it will be more convenient for them to pay by card, and also easier to ‘up-sell’ services to them, so smaller salons should ensure this option is available,” agrees Jayadeep Nair, vice-president of small business and new markets at provider Streamline.
Traditionally the barriers for salons when it comes to accepting card payment have been cost and complexity. But, argue providers, this is changing. The march of technology is also changing how and where in a salon you can take or process payment.
“New technology is opening up card payments for smaller salons, and even mobile hairdressers, thanks to the rise of sophisticated internet-enabled smartphones. With a small, inexpensive card reader and downloadable app the device can be turned into a chip and PIN-compliant card terminal,” says Global Payments’ Chris Davies.
“The reader ‘talks’ to the phone through a Bluetooth connection and the cardholder enters their PIN on the device. The cardholder’s details are kept as safe as a regular terminal. As the salon owner effectively supplies their own terminal, this instantly cuts the rental costs they can find prohibitive,” he adds.
Such systems normally require an upfront investment in a card reader with PIN pad (usually around £49) and then incur fees of around 2.75 per cent per transaction, he points out.
“Many salon owners have identified the need for portable terminals as they can bring the machine to the chair or simply pass to the client. Salons like Toni&Guy use us because our service reflects their key priorities, namely reliable, competitive and fees that stack up,” says David Maisey, managing director at provider Chip & PIN Solutions.
Innovations such as contactless payment and payment via mobile are still in their infancy – and in the case of contactless, the current £20 limit does put it below the threshold of most salon transactions.
But Streamline’s Jayadeep Nair forecasts its use within the industry will nevertheless grow.
The company’s own research has shown that in September 2012 there were just 52 contactless transactions carried out in hairdressers, barbers and beauticians. In August this year, by comparison, there were 508, still a small number in the overall scheme of things, but nevertheless increasing rapidly.
Speed of processing
Chip and PIN’s David Maisey predicts: “Many terminals work through a phoneline, therefore a salon owner cannot complete a transaction and take a call at the same time. Not only is a salon owner potentially losing business but the process can be slow. Many of our terminals use Bluetooth and Wi-Fi and therefore we are moving away from phoneline-based systems.”
Of course, fixed, landline-based countertop terminals may still be precisely what your salon needs. Just because the technology is available does not necessarily mean it will be appropriate – you still need to interrogate the business case. But increasingly the flexibility of mobile terminals does appear to be a compelling selling point.
As Patricia Fennessy, marketing manager at 123send, points out: “Mobile terminals offer true mobility and can be taken out to shows/events and passed to customers around the salon, while portable card machines can take payments up to 100 metres from the base station. Some of our customers have a fixed line at the entrance desk and also a mobile terminal to hand to customers around the salon.”
Moreover, being able to pay by card often leads to clients spending more than if they were handing over physical cash, she adds.
When it comes to upgrading, “any new payment system should be ‘future proof’, ” recommends Steamline’s Jayadeep Nair.
“For example old Chip and PIN machines can be easily updated to offer contactless payments. You should also be clear on the business benefits you are looking for, such as reduced waiting times, a terminal that can be used anywhere in the salon, accessing a new customer audience or just increasing revenue potential,” he adds.
If you read nothing else read this…
- Clients nowadays expect to be able to pay by card
- There is an increasing move away from landline-based systems
Chris Davies - Managing Director of Global Payments